MGMT 6360 POM Quiz 4 Name_________________________________

1. A student wants to balance following tasks using the “longest task time rule”.

Immediate

Task Predecessor Time (seconds)

A None 45

B None 30

C A, B 48

D B 20

E C 10

F D, E 20

G E 40

Cycle time is 48 seconds per unit.

(a) Draw the precedence diagram

(b) Balance the line by filling out below table.
(c) Calculate efficiency.

The cycle time (time between each unit coming out) is 1.3 minutes. Draw the precedence diagram.
Balance the line (assign all tasks) using the longest task time rule. Calculate the efficiency.

Work station Eligible Task Task time Sum Task Idle time
time

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Solution:

a) The precedence diagrams

b) We determine the theoretical minimum number of jobs (N):

N=
 homework time = 45 + 30 + 48 + 20 + 10 + 20 + 40 → N = 4.4375  4
CT 48

formula for calculating efficiency

% e =
 homework time = 213
100% → % e = 110.9375  111%
N  CT 4  48

We apply the assignment rule, considering the task that precedes the greatest number of tasks:

Task # Task precedence

B 5
A 4
C 3
E 2
D 1
F, G 0

Then we determine the workstations, considering the maximum cycle time of 48 seconds:

2
Work station Eligible Task Task time Sum Task Idle time
time

I B 30 30 18

II A 45 45 3

III C 48 48 0

IV E 10 30 18

D 20

V F 20 20 28

VI G 40 40 8

finally, we calculate the idle time:

idle time = 18 + 3 + 0 +18 + 28 + 8 = 75 seg  1,25 min

Which means that we must carry out the analysis of the production carried out and generate ideas
of use for that remaining time until it is optimally consumed.

c) we calculate the efficiency of the work done, considering the number of established workstations
(two additional stations)

% e =
 homework time = 213
100% → % e = 73.9583  73.96%
N  CT 6  48

3
2. Based on available information, a student develops a decision tree.

Payoff
($ millions)
(.5) Large Market
5.0

Produce &
(.5) Low Mkt.
Market
-4.0

Develop (.5) Large Market

Sell Idea 3.0
Product
(.5) Low Mkt.
-1.0

Lease for Royalty

(.5) Large Market
2.0
Sell Idea
Company A (.5) Low Mkt.
-1.0

(.5) Large Market

Company B 3.2

(.5) Low Mkt.

-1.4

0.7

a) Calculate expected value at every node including the first node. Show work.
b) What is the optimum decision and its expected value?
c) If your risk tolerance is $0, what is the optimum decision and expected value?

4
Solution:

a) We calculate the expected values in the decision tree branch

E(X) = 0.5(5.0) + 0.5(−4.0) = 2.5 − 2.0 = 0.5

E(X) = 0.5(3.0) + 0.5(−1.0) = 1.5 − 0.5 = 1.0

E(X) = 0.5(2.0) + 0.5(−1.0) = 1.0 − 0.5 = 0.5

E(X) = 0.5(3.2) + 0.5(−1.4) = 1.6 − 0.7 = 0.9

0.5

E(X) = máx{P & M,SI} = 1.0

1.0

0.5

E(X) = máx{compA,compB} = 0.9

0.9

5
 1.0

E(X) = máx{DP, LfR,SI} = 1.0

0.9

0.7

b) The optimal decision to choose the method of greater investment, which is for our problem to
Develop Product, with an expected value of 1.0 million dollars.

c) Risk tolerance = 0

E(X) = 0.5(5.0) + 0.5(0) = 2.5

E(X) = 0.5(3.0) + 0.5(0) = 1.5

E(X) = 0.5(2.0) + 0.5(0) = 1.0

E(X) = 0.5(3.2) + 0.5(0) = 1.6

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 2.5

E(X) = máx{P & M,SI} = 2.5

1.5

1.0

E(X) = máx{compA,compB} = 1.6

1.6

2.5

E(X) = máx{DP, LfR,SI} = 2.5

1.6

0.7

Considering that there is no risk, the optimal decision would fall on the development of
the product, with an expected value of 2.5 million dollars.